The Peoples Democratic Party (PDP) has said that the N6.08 trillion budget proposal for 2016 by the Federal Government, may throw the country into severe economic recession, like in the case of Greece.
The party said with the proposed N1.8trillion borrowing to fund the budget, the country would be borrowing N5 billion per day from first day in 2016 to the last day in the year.
Speaking with journalists in Abuja on Tuesday, the party’s National Publicity Secretary, Chief Olisa Metuh, stated further that there were no clear cut measures put in place to repay the N1.8trn loan being sought by the government.
He added that there were no corresponding provisions for economic production, in what he described as “a scenario that spells doom for the future of the nation”.
Metuh continued, “Some people may be wondering why we raised the alarm about the budget. The reason is simple. When we analysed the budget, we discovered it is a misshapen attempt at a Keynesian economics of applying deficit spending to stimulate growth even when studies have proven that GDP growth rates decrease by over 50% when debt goes from low or moderate to high. But then we know the borrowing here is to pay huge campaign debt and fund a political war chest.
“The President should explain to Nigerians how they intend to pay back the loan. Is it by continuous borrowing to service the interests, and does he intend to accumulate colossal debt for future generations of Nigerians?
“The truth is that this administration cannot justify this proposal. There is no known economy in the world where you can justify borrowing N1.84 trillion without specific projects and precise repayment outline.
“This is worse still in an oil-driven, mono-economy at a time crude oil is selling at $30 dollars per barrel and is speculated to go down to about $20 dollars or even lower in the next one year.
“The idea can only come when you diversify the economy and boost production capacity in manufacturing and other critical sectors, a direction, which the budget clearly failed to provide.
“From all indicators, the borrowing will be negative. They are driving us to be like Greece, and to plunge us into unnecessary debt. When the PDP took office in 1999, we achieved the cancellation of inherited debts.”
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